☆ Opinion: Proposition 19—implementation by dumpster fire
Image by Wikimedia Commons
Bay Area-raised Anne Gray volunteers with For Californians, focused on restoring Prop 58 parent/child transfer rights that were lost when Proposition 19 passed in 2020. In this Opp Now exclusive, Gray walks us through what she sees as the devastating fallout from rushed implementation, and asks, “Can’t we do better?”
Prop 19 obliterated a child’s right to automatically assume their parent’s assessed value on most inherited property. It also broadened qualifications to “port” one’s current Prop 13 tax basis from one county to another, and extended it from 11 to all 58 California counties. Yet County Assessors were given just 68 working days to implement Prop 19… during Covid, when staffing, remote work, and a pandemic gripped our nation. The results?
It took about a year to start issuing Prop 19 property tax notices because Prop 19 was sweeping and confusing. Still is. Assessors had to wait for guidance from the Board of Equalization and the California Department of Tax and Fee Administration. Eventually, many inheriting property owners got surprisingly high new Prop 19 tax bills, reassessments, and denials, in addition to stalled portability requests. They were livid.
The $1 Million Form. A child grieving a parental loss became ineligible for the $1 million value exclusion because he didn’t know he needed to submit a new Homeowners’ Exemption form in addition to moving into the parental home within 12 months of his parent’s death. (His Assessor probably did send the notice.) This exclusion is now gone for good. This child is now devastated by loss and confusion, a massive tax increase, and back tax bill. There was no room for error during a tumultuous and crazy Covid-era rollout. He is not alone.
Three years later, Assessors still don’t have a statewide processing system. Prior to Prop 19, “porting” one’s lower Prop 13 tax base was recognized by only 11 counties that processed requests using email, spreadsheets, and the telephone. Assessors continue to use these homegrown systems to manage burgeoning requests while building their own new portal.
A major blow to Prop 13. Before, under Proposition 58, tax increases due to property reassessment at death were rare. Now only the primary residence, farm, or ranch can qualify for any reassessment exclusion benefit. A “win” for those trying to dismantle Prop 13, piece by piece. Rental and business property taxes can now skyrocket—not good for tenants or local businesses when costs are passed on. Assessor workloads have exploded, including challenges on contested values rarely dealt with under prior law.
Tracking homeowners. Under Prop 19, if a child ever moves from an inherited residence, they lose their $1 million tax exclusion. Live in the home, but then move and rent it, lose the exclusion for good. Before, there was no tracking of inherited property unless it was eventually sold, and then normal property transfer tax law set in. Another new Assessor task—watch for unreported changes and track down violators.
Staff shortages when help is needed the most. An Assessor asked for seven more Prop 19-focused employees in an upcoming budget, but got two. In situations where huge tax increases and back tax bills are in play, taxpayers need immediate answers, not delays due to staffing. Implementation problems still exist.
Property owners don’t care about staff shortages, vague laws, or antiquated processing systems. Facing confusing and unimaginably high property taxes, they need speedy answers to make time-sensitive and life-changing decisions.
Take Sheri Duffy of Sunnyvale. She and her mom voted for Prop 19. They believed advertisements that it would help others while actually protecting the family home from higher taxes. She had no idea that helping the needy meant risking the roof over their heads. Her mom has passed, and she’s dealing with confusing rules, delays, and decisions she disagrees with, while working two jobs and struggling to pay higher Prop 19 taxes on the family home. Kick in the pants—she moved back to care for her elderly parents who planned for her to have their home when they passed. It was “affordable” then. Sheri is one of many trying to “Fix Prop 19.”
The short implementation time Assessors were given for rollout was a joke. And not a funny one. They asked for six months but got 68 working days—during Covid. What was so pressing that it couldn’t wait?
I’m told this is common practice. We tend to have a wild west, “let’s get ‘er done” macho mentality. Things must happen “now.” In corporate America, when the boss says to “do it,” it’s done. Heaven and earth will be moved to reach often arbitrary deadlines for senseless projects. Caught in the middle this time? County Assessors and the bereaved.
No wonder Jeff Prang, L.A. County Assessor, still calls Prop 19 a “dumpster fire” that impacts County Assessors, and those who own homes or rent, small businesses, farms, and ranches. A dumpster fire that also impacts most Californians.
Can’t we do better when planning for policy implementation?
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